Energy is by far the largest industry in the world. It is worth about $7 trillion per year, while the world’s total GDP is about $55 trillion. Thus, the energy industry is worth more than 10% of the entire world’s economy.

For the last 100 years, this industry has been ruled by fossil fuels. Our electricity comes predominantly from coal and natural gas, and our transportation fuel comes from gasoline and diesel – all of them are remnants of fossil deposits. The traditionally exploited fossil fuels are however fast depleting. This implies that over the next 50-75 years, a large part of the energy economy will be replaced by alternative fuels.

One may visualize the size of the transformation that is coming – a transformation that is likely to affect more than 10% of the entire global economy. This is the size of the opportunity that the alternative energy industry promises. The alternative energy revolution has started and is gradually picking up speed. So a massive transformation is going to take time to get completed – a few decades at the least – in the short and medium term, there will be a number of attractive opportunities for entrepreneurs.

Solar Photovoltaic in India – A Snapshot

Exploited potential (production/installed capacity) is very little; total installed capacity (grid and off grid) is approximately only 110 MW, and of that only about 17.82 MW (as of Dec 2010) is grid-connected (as of Jan 2011)

Future expected production/installed capacity

For solar CSP and PV together, National Solar Mission attempts to reach an installed capacity of

By 2013: 1-2 GW

By 2017: 4-10 GW

By 2020: 20 GW

Moreover, large areas of the Thar Desert has been set aside for solar power projects, sufficient to generate 700 to 2100 GW

Specific government incentives

National Solar Mission and other Generation Based Incentives (GBI) are available through Ministry of New and Renewable Energy

Amount of investments happening in this now, expected in future

Government is expected to spend $19 billion until 2022.

Key bottlenecks and barriers

Cost of solar PV

High population density (land scarcity)

Technology obsolescence

Cost of power generation - and trends in the same over years

Current cost of production (after bidding) – Rs 12/kWh. This includes O&M, amortized/depreciated capital costs, loan repayment costs, and other expenses such as insurance.

Costs of production expected of Solar PV power plants in the near future - Rs/kWh: